Why does this happen when I use Microsoft office Word?

That's a shortening of the filename that Widows uses to show that the file is either a temporary file or is already open.
If you open Windows explorer and go to the folder where you have an existing document you will see it's filename.
Now open Word and open that same document.
Go back to the folder where the document is and you will now see two documents.
One of the is the original and the other has $ in the filename.
The $ one is the file in use which is a copy of the original that is held in memory.
When you close Word without making any changes the $ file gets deleted.
If you make changes then the $ file is used to overwrite the normal file and then then it's name becomes that of the original file.

Thank you, Heliotrope!
That clears that up!

On a couple of occasions the $ file, when opened, was a series of small boxes, with a few letters here & there. No trace of the original text.

Why does this happen when I use Microsoft Word
Yeah, it's happened to me too; now maybe I can straighten it all out.

BTW, don't those boxes represent spaces or something not normally viewed? I get them when clicking on the $ kind of file, although they are all I get in that case.

Me, too, Tomkitten. It really bothered me as I imagined it was some form of corruption! I'd happily return to good ol' uncomplicated Word. I don't need all these fang-dangled, complicated, flash extra features!